Looks pretty good, but you should probably make there be a head bone, and then make the mouth bones start a little farther forward, so the mouth will open more naturally. And you should modify the head's texture so that it tiles with the body, and so that it isn't just the same old dragon's head.
And no, Modman, you can't make it more natural, unless you subsurf it(i.e. making it higher poly and smoothing it), which would make it too high poly for Glest.